Sun Pharma’s Outperformance likely to continue on a strong March Quarter

Sun Pharma is likely to report strong numbers in its March quarter to be announced today. The drug major is expected to post over 38per cent growth in revenues aided by both exports as well as domestic business. Its operating margins is estimated at 43.5 per cent, an expansion of over 200 bps over the year ago level. The operating profit is expected to grow 45 per cent to Rs 1852 crore.

Its export business, dominated by revenues from the US, is likely to post a revenue increase of around 45 per cent driven by factors like traction in base business, consolidation of URL and Dusa Pharma and price increases taken by Taro. In the domestic business, Sun is expected to post a revenue growth of around 18-20 per cent, outperforming the industry growth.

The Street is keenly watching out the management’s growth guidance for the current fiscal and update on the merger with Ranbaxy Labs. Analysts are expecting the company to grow at 15 per cent this year – any guidance above this would be a positive trigger for the stock. Sun Pharma’s stock is trading flat ahead of the results announcement.